What would an Australia without coal look like?

end of coal, the venture magazine“This country is blessed with a range of potential renewable options. We’re one of the driest continents on earth, we also have very high levels of sunlight, high wind conditions, so we can prosper in a low carbon economy,” former energy exec Ian Dunlop recently told WBUR radio in Boston. “But make no mistake; there’s going to be a cost to this. It’s not just going to happen easily. It is going to have an impact on economies all around the world. But the costs of doing nothing are far greater, as we are starting to see in Australia because of the impact on the economy of what’s now happening … is enormous.”

When a former chair of the Australian Coal Association makes this kind of a declaration, it’s time to look beyond the deeply fractured (and fractious) national climate change debate and consider what a future without coal could bring.

Economic Impact

end of coal, the venture magazineAs electricity producers continue to embrace cheaper renewable energy options, the economics of keeping coal plants operational are becoming less and less attractive. While thermal coal export volumes have grown to roughly US$47 billion, significant uncertainties loom: Issues of cost competitiveness compared to renewable sources, local community concerns about air pollution, and global efforts to reduce greenhouse gas emissions are creating an increasingly unhealthy climate for coal producers.

Export demand for thermal coal is driven by the importing countries and any reductions in coal demand over time, especially in the Asian countries that make up Australia’s largest import base, will negatively impact domestic production.

Australian coal plant closures are expected to increase rapidly over the next two decades, adding another layer of risk for investments in the sector. Aligning with the 2015 Paris climate accords, two of the country’s largest insurers, QBE Insurance Group Ltd and Suncorp, will no longer insure thermal coal and coal-fired power stations.

While the shaky economic situation will continue to cause sleepless nights for coal execs, ClimateWorks Australia posits that from the consumer side, a coal free future will be quite bright. A recent report noted, “Australia can achieve net zero emissions by 2050 and live within its recommended carbon budget, using technologies that exist today, while maintaining economic prosperity. Major technological transitions are needed in some industries and many activities, but no fundamental change to Australia’s economy is required. Economic activity and Australian incomes keep rising.” In their estimation, that rise will create a 2050 economy almost 150 per cent larger than it is today.

We’ll Be Rocking on to Electric Avenue

end of coal, the venture magazineReduced dependence on coal and a move to low carbon energy sources for electrical generation will create opportunities for transport, buildings, and industry to become better and more efficient electricity users.

  • Electric cars, trucks, trains, and buses will keep people moving. Zero-emission high speed rail will shear the travel time to just 3 hours between Sydney and Brisbane and Sydney and Melbourne’s CBDs, providing affordable and clean transport for 80% of our population.
  • New commercial and residential buildings will be designed to eliminate greenhouse gas emissions whilst generating and storing their own renewable energy. Australians could save up to $40 billion over the next 30 years through the implementation of upgrades to building technologies and practices. An added economic boost: the potential to create up to 50,000 new jobs in the construction trades just from retrofits alone.
  • At present, 21% of the country’s industrial emissions come from the manufacturing sector, with 8% of those emissions resulting from industrial heat processes. Zero-carbon factories will depend on renewables for heat processes, using no natural gas or coal.

A collaboration amongst ClimateWorks Australia and the Australian National University, supported by modelling done by Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Centre of Policy Studies (CoPS) at Victoria University reported: “Australia’s rich renewable energy resources could make it an energy superpower in a world where clean energy dominates. Together with substantial potential for geological sequestration and vast land available for carbon forestry, this creates economic opportunities for Australia in a decarbonised world.”